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Ethereum (ETH)
Basics * A Protocol Layer, the base blockchain for the whole Ethereum ecosystem, including all its tokens, network layers and application layers. * Ethereum is a decentralised smart contracts platform for Dapps. It is most widely known for all of it's children tokens that were created by ICO's. More then 20.000 tokens have been created this way (2017). By 9-2019 it is over 200.000. * Short explanation: Developer platform, as well as programmable contracts and money. * Longer explanation: Ethereum utilises smart contracts, which allow somebody to send money to another person automatically, but only when a certain set of conditions are met. For example, during the process of selling a house, the buyer and seller could enter into a smart contract that transfers ownership to the buyer, and money to the seller automatically once a deal has been reached. The other major benefit Ethereum holds is its developer platform, that allows decentralised applications (or Dapps) to be built on top of Ethereum. An easy way to think about this is that Apple or Microsoft allow developers to build applications on top of their software, and Ethereum takes a similar approach. It has its own functions, but also allows other developers to use its blockchain to build new applications and uses. This has also given rise to ICOs (initial coin offerings) being held on Ethereum’s network. ICOs allow developers working on new blockchain technologies to raise money by selling off tokens in their future application. * The following information comes from this post by Consensys (5-9-2019): "Like the Bitcoin blockchain, Ethereum utilizes nodes that are operated voluntarily in order to verify transactions in the network. Nodes can contain the entirety or a segment of Ethereum transaction history, the most recent information about the state of smart contracts, the balances of accounts, and more. At the foundation of Ethereum is the Ethereum Virtual Machine (EVM), which is the executable and trustless environment for smart contracts: computer protocols that facilitate, verify, and enforce the negotiation and performance of some sort of digital agreement. The EVM executes a contract with whatever rules the developer initially programmed, such as sending money from Alice to Bob. The EVM executes these programs through a bytecode language. Ethereum developers are able to use Ethereum programming languages such as Solidity and others to write smart contracts and build decentralized applications." Usecases * From the whitepaper: “In general, there are three types of applications on top of Ethereum. The first category is financial applications, providing users with more powerful ways of managing and entering into contracts using their money. This includes sub-currencies, financial derivatives, hedging contracts, savings wallets, wills, and ultimately even some classes of full-scale employment contracts. The second category is semi-financial applications, where money is involved but there is also a heavy non-monetary side to what is being done; a perfect example is self-enforcing bounties for solutions to computational problems. Finally, there are applications such as online voting and decentralized governance that are not financial at all.” Background * Yellow Paper: 4-2014, published by Dr. Gavin Wood, this would serve as the technical bible and de-facto specification for the Ethereum Virtual Machine (EVM)* Yellow Paper: 4-2014, published by Dr. Gavin Wood, this would serve as the technical bible and de-facto specification for the Ethereum Virtual Machine (EVM) * Stiftung Ethereum established 6-2014, in Zug * 11-2014: first Devcon * Date of trading launch: 7-8-2015 * From Token Tuesdays (25-9-2019): "Ethereum was said to have been proposed in late 2013 by Vitalik Buterin. Shortly thereafter, the Ethereum Foundation hosted one of the very first Initial Coin Offerings (ICOs) in which reports have suggested that around $18.3M worth of ETH was sold in exchange for 31,000 BTC in July of 2014. At the time, 60M of the 72M ether was sold to investors as part of the pre-mine when the network went live in 2015. Sources have claimed that the original conversion rate was set as low as $0.10/ETH. The DAO and ETC In the following year, a security malfunction written in The DAO’s smart contracts allowed hackers to steal over $50M worth of ETH during a poster child offering in late 2016. This resulted in the creation of a new primary Ethereum blockchain (the one we all know today) in which the hack was reversed alongside Ethereum Classic, in which the hack was never reversed." Bitcoin vs. Ethereum * From Token Tuesdays (25-9-2019): "Ethereum provided one of the first blockchain-based use cases for logic to be programmatically executed and stored on-chain via a Virtual Machine (VM) in a distributed fashion. Whereas the Bitcoin blockchain utilizes simplistic transaction logic in the form of UTXO’s (i.e. tracking whether a transaction is spent or unspent), with Ethereum, advanced logic can be written in smart contracts and executed autonomously without the use of third parties. (i.e. upon the successful transfer of ETH, have the contract automatically perform X, Y, and Z functions). Unlike Bitcoin’s predetermined schedule to reduce block rewards in half every 210,000 blocks, Ethereum has dynamically reduced block rewards through a series of hard forks. Over the past few years, we have seen a few forks including but not limited to the Byzantium fork in October of 2017, reducing block rewards from 5 ETH to 3 ETH (-40% change), and the most recent Constantinople fork in February of 2019, reducing block rewards from 3 ETH to 2 ETH (-33.33% change)." * The following information comes from this post by Consensys (5-9-2019): "The key element that distinguishes Ethereum from Bitcoin is smart contracts — agreements that are embedded in code so that they can automatically execute. Among the other fundamental differences between Bitcoin and Ethereum are their programming languages. Bitcoin uses a stack-based language while Ethereum uses a Turing-complete language. Their block times and hashing algorithms are also different. Ethereum’s core developers believe that moving Ethereum to a Proof of Stake system will make its smart contract-based network more efficient and secure." ICO and token * Had a Premine and a Presale/ICO. 550.000 eth went to Vitalik, Other founders/co-founders got between 200 and 450.000 ETH. 6 mil in total to the team. Vitalik also got 150.000 ETH through their dev program, which handed out 3 mil ETH to developers. * Highly deflationary economic model * Coincap: none for now, will change after switching to PoS * PoW, but will change to PoS * Uses accounts instead of UTXO’s (as Bitcoin does) * The proof of work algorithm used is called Ethash (a modified version of Dagger-Hashimoto) involves finding a nonce input to the algorithm so that the result is below a certain threshold depending on the difficulty. * From a Bitcoin.com article (18-10-2019) "A report published earlier this year by digital asset market analysis firm Delphi Digital stated that only 7,500 ETH wallets hold 80% of ethereum’s circulating supply." Ether is a commodity * From EthHub Weekly #83 (15-10-2019): "CFTC Chairman Confirms Ether Cryptocurrency Is a Commodity. CFTC Chairman Heath Tarbert has said ether is a commodity. Speaking at the Yahoo! Finance All Markets Summit Thursday, Tarbert said he believes ether is not a security. “We’ve been very clear on bitcoin: bitcoin is a commodity. We haven’t said anything about ether – until now,” Tarbert said. “It is my view as chairman of the CFTC that ether is a commodity.” Tarbert continued to say the CFTC is working with the SEC on the two cryptocurrencies and have agreed both are not securities. Going forward, the CFTC may allow ether futures to trade on U.S. markets, he suggested." Ether * From Token Tuesdays (25-9-2019): "Ethereum leverages a native currency, Ether, to execute transactions on the network. Whenever you hear the term “gas”, this simply refers to a very small amount of Ether that is consumed to reward miners for processing (or validating) your transaction. Units of ether are denoted in gwei with 1,000,000,000 wei being equivalent to 1 ether." * The following information comes from this post by Consensys (5-9-2019): "Ether is Ethereum’s native token and the fuel that powers the Ethereum blockchain. On Ethereum, each operation (many of which can be combined to create a single unique smart contract or transaction) requires a certain amount of computing energy to perform. Because miners must use energy to complete these operations, a unit of measurement was created to monitor and compensate miners for the work they spend running transactions and smart contracts. This unit of measurement is called gas. Gas is a unit of measurement that is unique to the Ethereum blockchain and that measures the computational work required to run transactions or smart contracts within the EVM. The more energy required to run an operation (i.e. a more complex piece of code), the more gas is required. The value of each unit of gas is expressed in ether. Ether therefore provides an incentive for miners to validate blocks of transactions and for developers to write concise, quality code. ETH is the symbol for ether. Note that “eth” is also a command line used for importing the Ethereum wallet." Gas limit * The following information comes from this post by Consensys (5-9-2019): "The Ethereum gas limit is one of three core concepts of ether. The others are cost and price. Limits are set as the maximum payment one is willing to incur to complete a transaction. If a gas limit is set too low, it is possible that the transaction will fail. This is because the miner who attempts the transaction will go on and execute operations until the gas limit is reached. If additional operations are required, then the miner keeps the gas as fees for work done and the system records the transaction as “failed.” Gas limits are important because they protect both users and miners from faulty codes and network attacks. They are relevant because the dynamic nature of the Ethereum blockchain is comprised of a variety of smart contract operational levels. Not all transactions are the same and therefore require different amounts of gas to fuel their operations." * From this article by CoinDesk (28-9-2019): "In order to prevent network congestion, miners on the ethereum network have recently responded to the surge in transaction activity by increasing ethereum’s “gas limit.” Stepping back, the cost to send a transaction on the ethereum network is called gas and paid in fractions of ETH called gwei. For every block processed on the ethereum blockchain, there is a limit to the overall amount of gas that can be collected by miners. In short, a higher gas limit means that a higher number of transactions can be included in a block. On Sept. 19, ethereum miners collectively raised network gas limits from 8 million to 10 million gwei. Ethereum blocks are now effectively 25 percent larger – allowing for larger transaction processing loads. At the same time, the concern around larger block sizes on ethereum is that block propagation speed may slow down. The slower it is for a block to be propagated and accepted by all miners in the ethereum network, the higher the likelihood is for temporary chain splits to occur. “As gas limit goes up, block size will eventually follow it, requiring more storage and initial sync time for nodes,” said Eric Conner, founder of ethereum information site ETHHub. “So far though, block size hasn’t really gone up despite the gas limit increasing.” Even so, some outside of the ethereum community have viewed the collective decision-making of miners on the platform with derision. “It’s official! Ethereum miners have unilaterally increased the gas limit and made it even harder to sync a full node,” tweeted self-proclaimed bitcoin maximalist Conner Brown. “Meanwhile ethereans rejoice at how easy it was for miners to do this without public debate.” Tech * Touring complete scripting language * Has a choice of clients: its main ones being go-ethereum by Geth (written in Google’s Go programming language) and Parity (written in Rust). Also has Pantheon Core now by PegaSys. * Ethereum smart contracts can be coded in Solidity, Serpent, LLL, and Mutan. These are contract-oriented, high-level languages. Their purpose is to target the Ethereum Virtual Machine (EVM) to provide a means for smart contracts. The Ethereum protocol has been developed using a variety of languages, from C++, Go, Python, Java, JavaScript, and Haskell. But many implementations are not being maintained anymore (C++, JS, Ruby, Haskell, Python, Erlang, C#). "I'm happy that we plan more clients in the #Ethereum ecosystem, but please remember the ghosts of the past (C++, JS, Ruby, Haskell, Python, Erlang, C#). We're walking on a graveyard of abandoned clients. Almost nobody realizes the effort involved in keeping Ethereum alive."  — @peter_szilagyi * Through the efforts of Slock, Ethereum can also be deployed on low-resource Ubuntu Core images. * Around 95 percent of Ethereum smart contracts are built on ZeppelinOS libraries. Ethereum Virtual Machine (EVM) * The following information comes from this post by Consensys (5-9-2019): At the foundation of Ethereum is the Ethereum Virtual Machine (EVM), which is the executable and trustless environment for smart contracts: computer protocols that facilitate, verify, and enforce the negotiation and performance of some sort of digital agreement. The EVM executes a contract with whatever rules the developer initially programmed, such as sending money from Alice to Bob. The EVM executes these programs through a bytecode language. Ethereum developers are able to use Ethereum programming languages such as Solidity and others to write smart contracts and build decentralized applications." * From this post: "This project focuses on preventing Denial-of-service attacks, which have become somewhat common in the cryptocurrency world. Moreover, the EVM ensures programs do not have access to each other’s state, ensuring communication can be established without any potential interference. To put this into a language everyone can understand, the Ethereum Virtual Machine is designed to serve as a runtime environment for smart contracts based on Ethereum. As most cryptocurrency enthusiasts are well aware of, smart contracts are very popular these days. This technology can be used to automatically conduct transactions or perform specific actions on the Ethereum blockchain. Many people predict smart contracts will help revolutionise finance and other industries over the coming years. It is also worth mentioning the Ethereum Virtual Machine has been hinted at in the Yellow Paper drafted by Dr. Gavin Wood several years ago. It is evident the Ethereum project was built with the prospect of introducing such a sandboxed environment to hone the smart contract technology in the future. A clever piece of design and coding, and one that will certainly help elevate Ethereum and smart contracts to the next level over the coming years. Since the Ethereum Virtual Machine is completely isolated from the rest of the main network, it is a perfect testing environment. Any company looking to create a smart contract can do so using the EVM, without it affecting the main blockchain operations. Testing this technology is of the utmost importance, as flawed code can spell demise for even the most exciting of smart contracts. Moreover, one could look at the EVM as a “learning environment” to build bigger, better, and more robust smart contracts as well. It is also worth mentioning every Ethereum node in the network runs their own EVM implementation and is capable of executing the same instructions. It is evident there is a bright future ahead for this project, as it will continue to receive some updates over time. It is a gateway to building proper smart contracts, both for novice and experienced coders looking to get a hands-on approach with the Solidity language. Additionally, the EVM have been implemented in Python, Ruby, C++, and a few other coding languages." EIP 1559 and tx fee burnings * From Token Tuesdays (6-2-2020): “With the potential future introduction of EIP 1559, this effect will compound. Every transaction on Ethereum will burn a portion of the transaction fees - effectively providing a dividend to Ether holders as everyone’s percentage ownership in the network increases equally.” The 2017 ICO hype * From Token Tuesdays (25-9-2019): "ETH saw the most price action in its short history during the ICO craze of 2017, in which any individual could easily create their own Ethereum-based currency in the form of ERC tokens. ''To quickly summarize why ether captured so much of value, ETH is necessary to create, transact and fundraise any ERC token. As such, ether saw a massive price spike in late 2017-early 2018 as speculative investors and opportunistic entrepreneurs looked to capitalize on Initial Coin Offerings (ICOs). Eager founders flooded into the market by selling “utility tokens” that did not inherently require any KYC or were not tied to any offering of equity. As it relates to the digital asset market today, ETH continues to be the second largest asset behind Bitcoin (BTC). During the most recent “crypto winter”, ETH has seen a significant decline from its peak (over 85% of the time of writing) and is currently exploring a new phase of price discovery as the network looks to transition to a new consensus mechanism via ETH 2.0 or Serenity (described below)." Stablecoins * From Bitcoin.com (31-1-2020): "The ETH chain has a great number of stablecoins such as TUSD, USDT, DAI, PAX, and GUSD. All five of these stablecoins leverage the ETH chain for stable value transfers. “Stablecoin transfer value has now flipped ETH on Ethereum,” Watkins tweeted. While sharing another chart, Watkins indicated that most of the story is consumed by tether (USDT) transitioning to Ethereum last year. Watkins believes the flippening took place in mid-2019 and emphasized that since then “Ethereum’s economy is now dominated by stable value transfer.” Additionally, researchers have noted that 70% of the circulating tether supply is controlled by roughly 104 addresses." Planned Hard Forks * Since Ethereum 2.0 introduces quite some new jargon, some of the terms are explained over here. * From Token Tuesdays (25-9-2019): "In the past year, we’ve seen a tremendous amount of progress towards Ethereum 2.0. If you’re unfamiliar with Ethereum 2.0 (also known as Serenity or Eth2.0), it’s a series of upgrades and improvements to the network in an attempt to achieve a fully scalable and decentralized smart contract platform. These upgrades largely include two main components: (1) sharding and (2) proof of stake. Sharding As a very high-level overview, sharding splits a blockchain network into smaller pieces, called shards. Shards represent a chain in the network where each shard contains a set of validators. With sharding, validators are now only required to process transactions in their shard, no longer requiring every transaction to be processed and verified by every node. This shift in architectural design drastically improves the transaction throughput for Ethereum. Proof of Stake (PoS) Similar to how Bitcoin leverages computing power to secure the network, Ethereum 2.0 is aiming to secure the network by leveraging capital. Users (known as validators) will lock up capital, in the form of ETH, to validate transactions in return for block rewards and transaction fees." List of protocol updates and Hard Forks: # Olympic pre-release (testnet, Chain #0, 9-5-2015) # Frontier public release (Ethereum Genesis, Chain #1, 30-7-2015) # Homestead (Block #1,150,000, 14-3-2016) # DAO Fork (Block #1,920,000, 20-7-2016) split with Ethereum Classic # DoS Fork (Block #2,463,000, 18-10-2016) # Spurious Dragon (Block #2,675,000 22-11-2016) # Metropolis will be done in two phases: Byzantium & Constantinople (has been on it's way since early 2017, got postponed to 2019 Update: Constantinople and St. Petersburg hardfork occurred successfully, including the most notable upgrade of reducing the new supply issue of reward per block which dropped from 3 ETH to 2 ETH with EIP 1234; Constantinople was originally due to go live in January but was postponed after the discovery of a potential security vulnerability; the two main Ethereum clients, Geth and Parity, stayed in sync with the correct block number, capping the first hardfork for the ecosystem in about two years) # The Serenity upgrade (with no due date attached) famously includes scalability solutions sharding and Casper, a hybrid consensus mechanism involving a combination of Proof of Work (PoW) and Proof of Stake (PoS). Together the two solutions have been dubbed “Shasper.” * Also had a Muir Glacier network upgrade(2-1-2020) which "went off without a hitch at block number 9,200,000 and the difficulty bomb has now been delayed by ~2 years." Serenity The new model will look like this: * Main Chain: This is the previously known original Ethereum Blockchain. * Beacon Chain: This is a coordination and validation layer. Its consensus algorithm is Casper (PoS). The Beacon Chain replaces Miners with Validators. If a validator wants to participate in the validation of Shard blocks, it must first deposit a fixed amount in Ether in the Validator Main Contract (VMC). The VMC is a smart contract that is stored on the main chain. The Beacon Chain regularly checks the Smart Contracts for new validators and then adds them to a list. The waiting validators are then assigned to random shards from this list. In addition, existing groups of validators are regularly shuffled. This sampling process is critical to the safety of Ethereum 2.0. Because of the random distribution, the validators cannot make any arrangements with each other and can execute 51% attacks on individual shards. * According to the Ethereum 2.0 specs, the Beacon Chain will support 1024 shard chains (In the Proof of Work #76 there was talk of a shift towards "less shards (64?) but faster cross-shard comms and 8x higher throughput per shard" (10-2019)), each of which will be validated by a collection of 128 nodes. (In this piece the number is 32) * Sharding Chain: This is where the Smart Contracts are executed and their data is stored. Ethereum has oriented itself here to traditional databases and their sharding techniques. Both transaction processing and blockchain data storage are divided into several computer groups called shards. Each shard is like its own small blockchain. Ethereum addresses, account balances, and smart contract data are divided among these shards. When a transaction is sent to the network, it is executed in the shard that has the address that signed the transaction. As a result, only a subset of all computers on the network need to complete this specific transaction, significantly reducing the burden on subscribers. * "There has been concern recently about whether or not the “composability” property of Ethereum - basically, the ability of different applications to easily talk to each other - will be preserved in an eth2 cross shard context. This post by Vitalik argues that, yes, it largely will be." * Before Serenity can complete Phase 0, there are two points on the agenda. After the upgrade of Constantinople in February 2019, the last planned hard fork Istanbul is scheduled for October. Update from EthHub #85 (28-10-2019): "Istanbul Going Live December 4th Ethereum’s next system-wide upgrade, Istanbul, is scheduled to arrive on mainnet the week of Dec. 4. The decision was made during an Ethereum core developer call on Oct. 25. 6 EIPs have been accepted for Istanbul and you can view them here. Editors note: I’m most excited about EIP-2028 which greatly reduces the cost for privacy tech such as STARKs!" Update: successfully went live at block #9,069,000. * In addition to the Ethereum 2.0 Beacon Chain, the old Ethereum PoW Blockchain is to be retained as the main chain. This original blockchain will be continuously updated and improved. These future changes will be summarised as Ethereum 1.x. Development of Ethereum 1.x will also begin in 2019 before the Beacon Chain is launched. * An update on how ETH 2.0 with shards will work can be read here (5-2019). * An update on the road map can be read here (7-2019) * from EthHub #85 (28-10-2019): "What's New in Eth2 - 25 October 2019 Another great Eth2 update from Ben. This update includes some great colour on the recent changes to sharding and composability in Ethereum 2.0 and what they mean for the network as a whole." * Phase 0: The Beacon Chain | 2019 * Phase 1: Shard Chains | 2020 * Phase 2: eWASM | 2020 or 2021 From an AMA (2-2020)" "The launch for Eth 2.0 was first slated for January 2020 and then an undisclosed date in Q2 2020. Developers are now eyeing the network’s fifth anniversary, July 30, 2020, for Eth 2.0’s debut. “Phase 0 will certainly launch in 2020. Audits are out and testnets are getting stronger every week,” Ryan said in the discussion thread. “I don't see a reality in which Phase 0 does not launch in 2020.”" In Phase 2, the functionality of Ethereum 2.0 comes together. With the introduction of a new Virtual Machine — Ethereum-flavored Web Assembly (eWASM) — shard chains evolve from fairly rudimentary data markers to fully-functional transactional chains, capable of scaling the Ethereum network. "It is important to note that during Serenity Phase 0, 1, and 2, the original PoW Ethereum chain will not go away. It will continue to be maintained alongside the Beacon Chain, with the miners on the original PoW chain still being rewarded in ETH through traditional forms of mining. Gradually, as the ecosystem transitions over to the Beacon Chain, the PoW chain may be phased out if the Difficulty Bomb renders it computationally obsolete because some advocate for its permanent continuation." * Another long read about how all phases will be played out can be found here (2-1-2020). Wallet and Staking changes * Some interesting take aways from this piece (2-1-2020): "Ethereum 2 has keys similar to Ethereum 1, but based on a different standard. This means Ethereum 1 keys cannot be used for Ethereum 2 transactions. Work needs to be carried out to build wallets that support Ethereum 2 keys. Many Ethereum 1 wallets were built at a time when the required functionality of a wallet and the best practice for its security were unclear. As a result there are many different incompatible implementations. Ethereum 2, by contrast, has a number of proposed standards such as EIP-2333, EIP-2334, EIP-2335, EIP-2386 and EIP-2426 that provide the basis for building Ethereum 2 wallets that are compatible across different implementations. Also, at current there is no standard for Ethereum 2 addresses. Addresses are important because they will contain checksums, helping to protect user funds against inaccurate cut-and-pastes or transcription errors. Discussions about the format for Ethereum 2 addresses are under way. Ethereum 2 has an active staking system, where the validators need to be constantly online and active to earn rewards (and avoid penalties). Although the costs for validator hardware are relatively low, the on-going work required to manage the network, software, etc. mounts up and as a result many Ether holders may prefer to let a staking service validate for them." Burning Mechanisms in Serenity * From Token Tuesdays (25-9-2019): "As we migrate towards the envisioned Serenity specs, we will begin to see the inclusion of a number of new burning mechanism(s) including: * Validators Inactivity: Validators who are inactive or offline will be subject to penalties in which the system automatically withdraws the staked ETH and burns it. However, Vitalik Buterin stated in a Reddit thread that chances of inactive nodes are fairly low but, “every 1% of validators offline cuts total issuance by around 3%”. * EIP 1559:This proposal suggests burning a small percentage of transaction fees to mitigate economic inefficiencies associated with miners having the ability to choose the highest-paying transactions. Ultimately, this plays a more important role as validators begin to rely on transaction fees rather than block rewards as the driving incentive." Ethereum 1.x'' '' "As the Beacon Chain is being tested and proven, improvements will still be made on the original Ethereum 1.0 chain. This series of upgrades and hard forks is referred to as “Ethereum 1.x” and will ensure the current Ethereum mainchain undergoes continued upgrades to meet ecosystem demand and adoption as the Beacon Chain scales." The team behind Ethereum 1.x is still in the early phases of establishing a roadmap, but they have determined three overarching goals for Ethereum 1.x upgrades: # Mainnet scalability boost by increasing the tx/s throughput (achieved with client optimizations that will enable raising the block gas limit substantially) # Ensure that operating a full node will be sustainable by reducing and capping the disk space requirements with “state fees” # Improved developer experience with VM upgrades including eWASM and a different transaction fee model that would stabilize overall transaction fees. # Working on the finality gadget to link Ethereum 1.0 and 2.0 by using the Beacon Chain to finalize Ethereum 1.x blocks. More information about Ethereum 1.x and the team behind its continued improvements and upgrades can be found here and here. Staking * from EthHub #85 (28-10-2019): ">109,000 Ethereum wallets with 32 Eth are ready to stake" Saying they are ready is a bit of an overstatement. It is simply the number of wallets with 32 ETH inside. Governance in Ethereum * Vlad Zamfir has apparently been writing something about Ethereum’s governance processes for a while, but by his own description they are: "…not very well documented, and it’s hard to understand them without actively participating in them…No one has full information about the structure of the processes involved." Current issues * Ethereum has a few issues at the moment. It is suffering the same scaling problems as Bitcoin due to the inherent size of their transaction capacity. * It’s become clear since the crash of crypto prices in early 2018 that the market for Dapps is much smaller than first thought, so Ethereum is experiencing slower than expected growth. On February 11, 2019, 93 percent of Ethereum DApps did zero transactions * There are also other platforms such as EOS creating similar technology that claims to be simpler to use, which are putting pressure on Ethereum in the long term. Pro's and Con's Advantages * Turing Complete allows a very broad range of Dapps to be programmed on the platform * Largest following amongst blockchain developers * Arguably the best developer tools * Large corporate support through the Ethereum Enterprise Alliance (EEA) * Concise programming language suitable for blockchain Risks * A repeat of the DAO hack on other software developed on the platform due to the room for error and unfamiliar programming language * Slower uptake due to unfamiliar programming language * Superior tech may overtake it * Uncertainty surrounding PoS shift Usage * From Our Network #6 (30-1-2020): "The current view of Ethereum’s Mean Age highlights a year-long period of relative token inactivity (barring a few minor bumps at short-term price increases). On aggregate, previously dormant coins aren’t moving or being interacted with, and the average age of ETH (network-wide) continues to grow. This is further reinforced by the declining share of Ethereum tokens that have moved within the last 365 days; On January 1st, 2019, 54.6% of all ETH in existence was active within the past year. At the end of January 2020, this number has dropped to 39.6% of the total ETH supply. Both data points highlight the same trend - ‘old’ coins remain relatively unutilized, and the share of active coins continues to decrease. With the explosive growth of ‘ETH locking’ mechanisms and DeFi solutions, this is likely to become the norm in years to come." * On February 11, 2019, 93 percent of Ethereum DApps did zero transactions. * According to Consensys in September 2019 there were: ** 2,597. Total decentralized applications built on Ethereum. Update (2-2020): now 3303. ** 16.9k. Daily active dapp users Companies who build on Ethereum * The list is (as of 16-1-2020) as long as 359 projects that are not paid for by the Ethereum Foundation or ConSensys. Some of them are mentioned below: * Amazon * BBVA * ABInBev * BNP Paribas * CargoX * Ciox * BP * Citi * Coinbase * Comcast * Fidelity * Foxconn * Google * Hewlett Packard Enterprise * HTC * Intel * Microsoft * Northern Trust * Overstock * Opera; "the 6th largest browser in the world, added (1-2020) native support for Ethereum at the end of 2018, and in 2019 launched a desktop browser complete with a “Dapp store”." * Siemens * Samsung; "released a developer platform built for Ethereum, and announced a new phone with a built-in Ethereum wallet." (1-2020) Other Hard Forks (ETC, etc. ;p) Ethereum Classic (2016) * From Token Tuesdays (25-9-2019): "In the 2016 a security malfunction written in The DAO’s smart contracts allowed hackers to steal over $50M worth of ETH during a poster child offering in late 2016. This resulted in the creation of a new primary Ethereum blockchain (the one we all know today) in which the hack was reversed alongside Ethereum Classic, in which the hack was never reversed." * From this article on Ethereum forks: "Ethereum Classic is the first hard fork of the original Ethereum blockchain, and it was a contentious hard fork. The hard fork was a result of a difference in ideologies. The core developers had a choice between either: # Accepting the reality that the hack occurred and nothing can be done since the blockchain is an immutable ledger or; # Implementing a ‘hard fork’ in order to ‘wipe’ the transaction and stop the hackers from getting away with the money, basically reversing the transaction However, there was a solid segment of the community that did not agree with this approach under the philosophy that the Ethereum blockchain should remain immutable. They reckoned that changing the past would set an unhealthy precedent in the future, thereby compromising the very principles that were envisioned for blockchain technology. However, the majority of participants on the Ethereum blockchain – led by Ethereum’s core developers – felt that the right thing to do was to reverse the transactions. In order to do that, a hard fork was needed since it required a change in Ethereum’s underlying codes. The hard fork resulted in a split of the Ethereum blockchain; the new chain – supported by the core developers and the majority of participants – was called Ethereum while the old (or “legacy”) chain – supported by a small minority – was re-branded as Ethereum Classic. Here's a more detailed look at the hard fork surrounding Ethereum Classic. "One of the major reasons that Ethereum Classic is still surviving is due to the promotion efforts of Barry Silbert, whom apparently owns a significant stake of Ethereum Classic. He has a lot of influence in the cryptocurrency community in general, and he owns Digital Currency Group, which has invested a substantial amount of money into different areas of cryptocurrency. The main goal of Ethereum Classic was to preserve the philosophy of an ‘immutable’ blockchain. They believed that implementing a hard fork in order to restore the stolen funds from the DAO would undermine this principle entirely. Therefore, by refusing to cooperate with the rest of the network, they wanted to take a stand for their principles. Essentially, one could consider Ethereum Classic to be an ongoing legacy of that fundamental protest. '' ''In general, Ethereum Classic was received with mixed emotions from the community as there was a difference of opinions on the issue. There were plenty of members of the community that respected and commended those that refused to cooperate with the hard fork." Ether Zero * Again from this article on Ethereum forks: "The aim of Ether Zero (ETZ) is to offer thousands of transactions per second – compared to Ethereum’s current rate of 15 transactions per second – with zero fees! It is an ambitious goal that many have called into question. EtherZero was scheduled to launch on Ethereum’s block number 4936270, which occurred on January 20th, 2018. According to its website at the time of writing ''(This article does not state a date anywhere), it still does not possess a block explorer, which is a bit disconcerting for any cryptocurrency in this space that wishes to receive any level of legitimacy or widespread adoption. These are the purported features, according to its website:'' # Two-Layer Network System: Ethereum allows individuals to power their transactions via the Gas that is supplied to the network. EtherZero eliminates this system and instead has opted to add another layer to the protocol as a means of facilitating transactions that take place on the chain through the dApps. '' # ''0 TX Fee: This purported bonus feature speaks for itself! # Instant Payments: ‘Instant’ is always subjective in the crypto world and we won’t be able to assess the quickness of the payments of the network until it has reached the phase of 100% release. # High Scalability: See ‘Instant Payments’ above. # Autonomous Community Governance System: Rather than having a centralized authority that is able to settle disputes or make overarching decisions about the future direction of the chain, there is a governance system that has a democratized means of implementing solutions. # Masternode System: Becoming increasingly popular in the crypto world is the implementation of a Proof of Stake consensus algorithm that is contingent upon ‘masternodes’, or ‘voters’ that approve the blocks on the chain that are chosen based on how large their stake is in the cryptocurrency’s ecosystem. It thrives on an initial supply of 194 million ‘EtherZero’ tokens, which is a quantity of 100 million more of its units than what Ethereum holds and it also utilizes the PoW consensus algorithm, just like Ethereum. The difficulty adjustment is dynamic, and one must use GPU hardware in order to mine blocks on its network. Based on their roadmap, they have not manifested any of the tech necessary to truly evaluate its efficacy as a currency, let alone one that is a fork of Ethereum. As you most likely observed with the Bitcoin hard forks, the purpose of most forks is to provide some sort of inherent utility that the legacy chain did not possess and refused to or could not implement. The primary feature that it boasts is that individuals will be able to make instant payments to one another with shocking speed without needing to receive any sort of fee or compensation. This design means that the miners must rely on the block reward exclusively. There are both pros and cons to such a PoW blockchain consensus structure that EtherZero will have to navigate through in the near future." Being 'Unforkable' (2019) * Due to all the DeFi projects that are now running on the Ethereum platform in such a tight ecosystem, some have argued that Ethereum has become 'unforkable'. Team of the Ethereum Protocol * Has a huge community of developers, projects and foundations. For an info graph, check here. * Joe Lubin Announced the 1 Million Developers Initiative (10-2019) * Butterin, Vitalik; founder, council of the Foundation * Lubin, Joseph, co-founder, came on in a later stage then Di Lorio and funded a bigger chunk of money. * Di Lorio, Anthony; came on in the early early stages before the presale and provided early funds * Lubin was eventually introduced by Di Iorio to Vitalik Buterin, Ethereum’s then 19-year-old creator and boy genius of crypto. Having read Buterin’s November 2013 Ethereum white paper, Lubin got in on the ground floor of the Ethereum project and attended the group’s foundational meeting in Miami in January 2014. He continued as part of the core group through Ethereum’s $18 million initial coin offering in July 2014 and was rumored to be one of the biggest buyers during the token’s initial crowdfunding, at prices estimated to be well below a dollar. Ultimately, Ethereum’s founding team bickered and parted ways. Buterin continued to focus on the technology, while Lubin hatched his plan to create a business ecosystem around Ethereum. * Casey Detrio; long-term Ethereum developer * Chan, Ming, Executive Director * Evan Van Ness; prominent community member * Gerring, Taylor; co-founder * Hoskinson, Charles; funded Vitalik after reading the whitepaper, is credited as a co-founder. Later moved over to ETC and then started Cardano * Hudson Jameson; long-term Ethereum developer and community manager * Jeremy Wood, left and asked Charles Hoskinson to start IOHK with him * Lombrozo, Eric; helped keep the presale bitcoins secure with his multisig wallet company, syfrex * Mougayar, William; special advisor * Nerayoff, Steven; according to one bio “Steven's innovative work as the legal architect of Ethereum's record setting token sale continues to be the basic structure used throughout the world today. Steven innovated the concept of "utility", specifically using the concept of "gas” or “fuel” for legal purposes.” * Lane Rettig; well known dev * Wilcke, Jeffrey; founder, Ethereum Foundation; Technical Steering Group * Wood, Gavin; founder * Zamfir, Vlad; works on PoS, but left to work on Casper at Casper Labs * Tual, former CCO * Leverington, Alex; “has been involved with Ethereum as a core developer since the very beginning. He worked at ETHDEV, where he architected and programmed devp2p, Ethereum’s underlying P2P protocol layer. Alex has made key contributions in Ethereum encryption and security, primarily touching the various communications protocols. He remains active in the protocol steering group.” * Colbin, Greg, Dr.; “worked on the Ethereum Virtual Machine (EVM) for Ethereum DEV.. His work includes pushing the boundaries of EVM performance and evolving the EVM architecture and Ethereum specification. Greg has had decades of technical experience inventing algorithms, designing systems, and programming applications and servers. His experience includes building and leading world class teams.” ''Joined (28-5-2019) Algorand’s Theory Team to work on key Roadmap Items. * Ying Zhang; A senior developer of Ethereum. Senior engineer, from Huawei and served as CAO and CTO of several companies. * Joseph Poon; proposed Plasma: ''A Scalable Autonomous Smart Contracts, along with Vitalik Buterin * Bob Summerwill, former developer * George Hallam; “George joined Ethereum as Business & Partnership Director in Mid 2014. He quickly established himself as a key communicator, moving to the role of Head of External Relations where he successfully advocated the Ethereum platform to the world and coordinated the Ethereum Foundation’s yearly developer conferences in London and Shanghai. During his 2 years at the Ethereum Foundation, George grew a strong appreciation and understanding of the Ethereum community and the ecosystem it inhabits.” Partners to the Ethereum Protocol (not per se to the Ethereum Foundation) * JPMorgan, Microsoft, R3 CEV, IBM, Santander; investors. * Microsoft's Bletchley platform is anchored on the Ethereum blockchain. * Recently joined forces with Hyperledger. * Is a founding member of the ECF. Investors and funding in the Ethereum Protocol * Is one of the investments chosen by Grayscale, owned by DCG (Grayscale also owns 1% of the BTC supply). Interestingly enough, Grayscale also was behind starting up Ethereum Classic, which it also holds in one of it's trusts. * Supports ChainSafe according to their website (as of 9-2019). * Has funded Gitcoin's grant program (3 times, total of $150.000). Ethereum Foundation Basics * Launched on 25-1-2014 * In 2-2019 there was a leaked document about maintaining cohesion ahead of its (at the time pending) Constantinople, Create2 fork. This document contained a long list of signatories from all kinds of projects. * Their ETH funds can be viewed here. On 21-5-2019 it held approximately 0.6% of all ETH. Funded projects: * Issued a total of $2.86 million to 20 different projects in Wave IV of its Grant Program. 10-2018. Since the program’s launch, the foundation has committed over $14 million to 72 projects, the majority of which has gone to startups focused on scaling, with security and user experience receiving the next most in funding. Securing $500,000, Status’ Nimbus, an Ethereum 2.0 sharding client, is tied alongside Prysmatic Labs’ Eth 2.0 Prysm client for attracting the most funding. These two are followed by the $420,000 accrued by Spankchain, Kyokan and Connext for a collective project, originally unveiled at DevCon 4, focused on a non-custodial payment channel. To the tune of $375,000, the third largest grant was awarded to Prototypal for “front-end state channel research and development.” * Honorable mentions include the $250,000 allocated to Finality Labs’ work on forward-time locked contracts (FTLC) and with a like amount given to Kyokan to develop cash and debit plugins for Plasma, an Ethereum payment channel solution in the same vein as the Lightning Network. * For developer experience, TrueBlocks secured $120,000 to create an open source block explorer, and Gitcoin received $100,000 to kickstart bounty funding on its platform. * Gave a grant to VIP Node * DeepSea, a smart contract research, and development project, received a grant from the Ethereum Foundation to develop a new smart contract language for the Ethereum Virtual Machine; DeepSea is lead by Professor Ronghui Gu, an assistant professor of computer science at Columbia, and collaborates with researchers at Yale * Client teams supported by the Foundation in 2019 include Nimbus, Prysm, Sigma Prime, and Substrate Shasper are among those working to turn ETH 2.0 into a reality. * Has funded the ETH 1.x initiative, ZK-rollup and ETHGlobal in 2019 * Gave (8-2018) a grant of 100K to Uniswap. From the EthHub Weekly #84 (21-10-2019): "The UniswapDEX.com site is a new web interface to the Uniswap contracts that were developed as part of an Ethereum Foundation grant. Using this interface you can instantly convert between Ethereum and any other ERC-20 token. You can also become a liquidity provider and earn about 3% APR for the ERC20 tokens you are not using. Many more features are also included so check out the announcement post here." * Gave $4M with 6K ETH Performance-based Bounties to Starkware. Development of standards report and production-quality software for optimized STARK-friendly hash functions and tooling * Has backed Connext * Gave a grant (11-10-2019) to Unstoppable Domains * Funds (1-2020) Plasma Group * Started doing pro bono security audits in early 2020. First know one was on Tornado Cash, a ETH mixer, which indeed turned out to have a vulnerability. Team * Buterin, Vitalik; co-founder, council * Chan, Ming, Former Executive Director * Aya Miyaguchi; Executive Director * Gerring, Taylor; co-founder * Charles Hoskinson; funded Vitalik after reading the whitepaper * Lubin, Joseph, co-founder * Mougayar, William; special advisor * Wilcke, Jeffrey; founder, Ethereum Foundation; Technical Steering Group * Zamfir, Vlad; works on PoS * Viktor Trón, core dev * Zsolt Felföldi, core dev * Tual, former CCO * Hudson Jameson * Virgil Griffith * Jutta Steiner began her blockchain career as Ethereum Foundation's original Chief of Security, overseeing security audit and integration prior to the launch of the public blockchain in 2015. * Martin Holst Swende, security lead * Alex Van de Sande * Bob Summerwill; used to be involved * Koh Wei Jie * George Hallam; worked for 2 years for the foundation coordinating confrences * Matthew Di Ferrante; Security at Ethereum Foundation * Martin Lundfall; Formal Verification Researcher * Eva Beylin; previously worked with Investors into the Foundation * JPMorgan, Microsoft, R3 CEV, IBM, Santander; investors * From CoinSpice (26-12-2019): "Buterin was interviewed by Eric Weinstein of Thiel Capital where he revealed having how he “did get the Ethereum Foundation to sell 70,000 ETH like basically at the top and that’s doubled our runway now, so it was one good decision that had a lot of impact,”" Partnerships with the foundation * Is backing accelerator program Startup Studio * Ethereum Foundation partners with Filecoin to build ASICs that support the upcoming Ethereum 2.0. To be more specific, the technology being supported is called the beacon chain, which is a random number generator of the upcoming Ethereum 2.0. Having the same terms as the mining equipment technology, the Ethereum 2.0 ASICs have completely different processes. Instead of performing intensive computational mining processes, the Ethereum 2.0 ASICs will help to shuffle the validators intended to replace miners in ETH’s proof-of-stake system, which is expected to prevent anyone or any organizations from combining enough power to overtake system operations. According to Coindesk, in order to develop the ASICs, the Ethereum Foundation works together with Filecoin, whose ICO managed to raise $250 million last year. The open project’s cost is estimated between $20 million to $30 million, with up to $25 million alone to be spent on research and development, while the remaining $5 million will be used to build 5,000 machines. * As of 7-2019 on the partner & clients list of ZeppelinOS. Ethereum Enterprise Alliance Basics * The Enterprise Ethereum Alliance (EEA) connects Fortune 500 enterprises, startups, academics, and technology vendors with Ethereum subject matter experts. The EEA is helping to evolve Ethereum into an enterprise-grade technology, providing research and development in a range of areas. * According to Consensys: "The Enterprise Ethereum Alliance (EEA) was formed in 2017 to accelerate the adoption of Ethereum in enterprise endeavors and to provide global standards for Enterprise Ethereum development. The Alliance uses an open architecture for testing and certification and focuses on providing resources for trust, privacy, and performance to foster a community that supports open source blockchain solutions. The EEA recently released their Enterprise Ethereum Client Specification V3." Members and Partnerships of the EEA * The EEA was launched in Feb. 2017 with a core team of 30 founding members, which included the likes of JP Morgan, Microsoft, Intel, Accenture etc. * The Enterprise Ethereum Alliance is the world’s largest business blockchain consortium with 500+ members and the first global standards organization to deliver an open, standards-based architecture and specification of Enterprise Ethereum. * Inculding: accenture, amis, BBVA, BP, Brainbot, BNY Mellon, CME Group, Consensys, Chronicled, Credit Suisse, Cryptape, Decent, Deloitte, Fubon Financial, IC3, ING, The Institutes (Risk & Insurance Knowledge Group), intel, JP Morgan, Monac Industries,Ledger, Microsoft, Nuco, Thompson Reuters, Request Network Foundation, Ripio International Ltd, Royal Bank of Canada, Shell Global Solutions International B.V., SK Telecom, Smart Valor, VeriToken, Royal Bank of Scotland, Oracles Network, Lunyr Inc., JP Morgan Chase Bank, Infinity Blockchain Labs, HashCash Consultants, GamerToken, Finchain, Ernst & Young, Etherisc Inc., DENT Wireless Limited, Crypto Valley Association, Blockchain Association, ETHLend, GoChain, Golem Factory GmbH, Hyperledger, IC3, iEx.ec (iExec has been a member of EEA and a chairman for the trusted compute group since 2017), Samsung SDS, Tesla Foundation Santander, String, Telindus, Tendermint, UBS, Vidroll, Wipro, BlockApps, Auctus, Covesting International Limited, WeChain. * The list goes on and can be found here * The Enterprise Ethereum Alliance (EEA) and Microsoft are facilitating a project between major enterprise blockchain providers to design and create an easy-to-use toolkit to launch tokens and other digital assets for enterprise needs (e.g., tokenize barrels of oil), CoinDesk reports; this so-called "Token Taxonomy Initiative" aims to be protocol neutral and crosses Ethereum, Hyperledger, R3’s Corda and Digital Asset’s DAML * Partnered with Dysopsis Enterprise-grade Product Launches "Product-wise, we might look back on 2018 as the year that momentum around Enterprise Ethereum products reached a level reflective of public Ethereum. Up until this year, JP Morgan’s Quorum has been the primary Ethereum client modified for enterprise needs, allowing permissioning controls regarding access to networks and more robust privacy settings. Quorum implementations fall under a public licensing which necessitates that any software created with it be made open source. This year, more Ethereum clients have launched (including Mana, a client written in Elixir a coding language based on the Erlang’s Virtual Machine) to improve on Quorum and broaden the market. The most significant advancement is Pantheon from PegaSys, the Protocol and Engineering Group at ConsenSys, which we wrote about back in October." Team, etc. * Bob Summerwill; was instrumental in founding the Enterprise ETH Alliance * Team members can be found here. EEA Board of Directors (as of 2-11-2019): * John Whelan; Chair, Santander * David Treat; Vice-Chair, Accenture * Marley Gray; Treasure, Microsoft * Matthew Spoke; AION * Victor Wong; Blockapps * Subhankar Sinh; BNY Mellon * Jeremy Millar; ConsenSys * Aya Miyaguchi; Ethereum Foundation * Thomas Willis; Intel * Vanessa Ferandes; ITAU Unibanco * Samer Falah; JP Morgan * Andrew Miller; University of IllinoisCategory:Coins/Tokens Ethereum Trust Alliance (ETA) Basics * A security rating system for deployed Eth code * From their website (11-2-2020): "The ETA is a group of global blockchain security companies that are creating a security rating system for smart contracts to help users gain greater awareness of smart contract security and differentiate contracts which have gone through rigorous security checks. The ETA will create a registry of smart contracts, where anyone can easily query the security rating level of a smart contract. With this, a variety of use cases will be enabled. Ethereum wallet users will see a contract’s security rating before they send tokens to it and executives and investors will be able to easily determine the risk level of smart contract systems. Exchanges can require a specific ETA rating level before new tokens are listed. Multi-member consortia with smart contracts created by multiple entities can require an ETA rating before they are published, and organizations will be able to include the ETA ratings in their internal (or external) risk analysis and assessment." Roadmap * From their website (11-2-2020): "We are now beginning work on the of first specification to be delivered in Q1 2020, which will include: 1. Rating level definitions and requirements 2. Security tools and auditor requirements 3. A process for the application and issuance of ratings badges 4. Specifications for the API and registry. After publishing the specification, we will begin community trials and testing of the API and Registry as we prepare to go live." Team * MythX, Quantstamp, Runtime Verification, Sooho, SmartDec and ConsenSys Diligence are the starting members.